Richard Alvin, Group Director at Capital Business Media and a former advisor to the UK government on start-ups and SMEs shares his thoughts with Business Leader on the topic of furlough funding and the entrepreneurs who have used it though the COVID-19 pandemic.
There never were such times for businesses and the hard-working wealth-creating individuals behind them. Bosses are an easy target in the pandemic, but they are sadly amongst those who’ve borne the brunt of it with the stresses and strains of keeping their businesses afloat.
Yes, employees have had it tough too and I don’t belittle that for one minute. Workers may have been furloughed with all the uncertainty that brings or, worse still, made redundant, a tragedy for themselves and their families. But bosses have to carry the weight of responsibility not just for themselves and their families but the whole business and every one of their employees – and their families. That is a heavy burden to impose on anyone.
I know what’s like, I’ve been there and I’m lugging the weight – I take my hat off to all you out there who are doing the same. Once all this is over, the responsibility doesn’t end there, of course. In fact, the responsibility simply gets greater and more burdensome.
It’ll be these same bosses who will have to rebuild UK PLC’s shattered economy and likely put more Corporation Tax into the nation’s coffers. That’s why it irks me when I read about bosses getting it in the neck when really, they are what is holding this country’s ragged economy together.
The other day a national newspaper lambasted Pippa Middleton’s husband James Matthews and his brother Spencer for using the furlough scheme for their respective businesses. Now these two chaps – I don’t know them – have substantial personal wealth, it was reported.
The newspaper accused these two “high net worth individuals” of “taking advantage” of public money offered under the Coronavirus Job Retention Scheme. James furloughed six employees on his Scottish shooting estate. ‘Posh nob robs public purse!’ the headline screams in my imagination.
But this is way off beam. While I haven’t personally claimed any furlough money, I don’t begrudge these chaps or any other personally wealthy business owners from claiming. This is cash made available by the Government to help individual workers and their families. It’s the Welfare State reaching out to the ordinary man or woman in the street and helping them keep a roof over their heads and food on the table.
Furlough money is meant for people, separate from the business. Yes, of course a company benefits by not having to pay the bulk of the wages but what is the alternative? If a company has been ordered to shut by the Government and has no business and no income it therefore needs no employees. They are literally redundant because there is no work for them.
High net worth bosses may be able to lend their own company money to tide them through a short rough patch, but they really can’t be expected to pour money into a seemingly endless black hole not knowing if, or when, their business can trade again. Companies aren’t the Welfare State and while all the best bosses will do their upmost to protect and support their employees at times of crisis, they are not charities able to dole out wages for nothing for months on end.
On March 20 the furlough scheme will have been with us for a year. In all good faith which boss, barring probably Elon Musk, Jeff Bezos, Bill Gates and maybe HM The Queen, could afford to fund the wage bill for their entire workforce for a year? Even members of the royal family have had to seek help.
It’s been a year like no other and many bosses have never claimed a penny from the Government in their careers. It’s quite simply unprecedented and there is absolutely no reason in my mind why wealthy individuals should be vilified for claiming furlough money.
What I don’t like, however, is these wealthy individuals taking grants or cheap loans at the Government’s – or the taxpayers’ – risk. Every business owner at some stage has had to put money into their own business and these individuals can really look after themselves in that regard.
So, my message to the tabloids is to just think a little bit deeper and don’t fire off at easy targets even if they are Posh Nobs shooting grouse on a country estate. Right now, business owners not in the celebrity category need to feel good about their decisions, and these tabloids only further instil guilt amongst them.